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Volume 2014 - Number 6

February 14, 2014

Bulk of Legacy Representation and Warranty Issues Appear To Have Been Dealt With By Banks; Some Risks Remain

Issuers of non-agency MBS and agency mortgage sellers have addressed most of the legacy representation and warranty issues that have bedeviled the market for the past few years, according to industry analysts. However, repurchase and buyback issues haven’t been completely resolved as investors and regulators make last grasps at recoveries. Analysts at Compass Point Analytics & Trading estimated that the total losses incurred for rep-and-warrant claims from Fannie Mae, Freddie Mac, the Federal Housing Finance Agency, the FHA and non-agency MBS investors by publicly traded U.S. originators still in existence will total $89.0 billion. The analysts said lenders have charged off or reserved $88.0 billion for such losses. Compass Point said...

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This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.



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With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.


No. It’s still difficult compliance/regulatory-wise.


Maybe. It’s under consideration.


Not now. But things could change as 2018 progresses.